ZaZa Energy Corporation (NASDAQ:ZAZA)
Q1 2013 Earnings Call
May 15, 2013, 10:00 am ET
Jay Morakis - Partner, JMR Worldwide
Todd Brooks - President & CEO
Ian Fay - CFO
Thomas Bowman - EVP Evaluation, Geology & Geophysics
Robert Kecseg - Las Colinas Capital Management
Brian Kabot - Riverloft Capital
Good day ladies and gentlemen, and welcome to the ZaZa Energy Corporation First Quarter 2013 Earnings and Operational Update Call. My name is Mathew and I’ll be your operator for today. At this time all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. (Operator Instructions) As a reminder this conference is being recorded for replay purposes.
And now I would now like to turn the call over to Mr. Jay Morakis of Investor Relations. Please proceed sir.
Thank you. Good morning and welcome to ZaZa Energy Corporation’s first quarter 2013 results and operational update conference call. Today’s call is being webcast on our website www.zazaenergy.com and can be accessed on the Investor Relations section.
With me this morning are Todd Brooks, President and Chief Executive Officer; Ian Fay, Chief Financial Officer and Thomas Bowman, Executive Vice President of Evaluation, Geology and Geophysics.
Before we begin, I would like to remind everyone that statements made on today’s call and webcast may contain forward-looking statements as defined by the Securities and Exchange Commission. Forward-looking statements can identified by such words as anticipates intense, plan, seeks, believes, estimates, expects, forecasts and similar references to each periods.
Any statements made public are subject to a number of assumptions, risks and uncertainties, many of which are beyond the company’s control and which may cause actual results to differ materially from those implied or expressed by those statements. For a list of risk factors, please refer to our 2012 Form 10-K and 2013 first quarter 10-Q filed with the Securities and Exchange Commission.
At this time, I would like to turn the call over to ZaZa’s President and CEO, Mr. Todd Brooks. Todd?
Thank you, Jay. Good morning everyone and thanks for joining this call today. There has been a good deal of activity in the first quarter and in the week since, and if you were to compare us to our first quarter in 2012, we are truly a different company today. We retooled ZaZa both operationally and financially and I believe we are and we will continue to be in the months and quarters to come in a much stronger position to efficiently grow our production base and generate consistent returns for our shareholders.
What I would like to do today is review our market position and strategy and the deals we announced in Q1 two of which subsequently closed in the second quarter, and one as we announced yesterday in our earnings release we remain in active discussions with the acquiring party and are working towards a successful closing while we now pursue alternative paths. I will discuss this in a little bit more detail in a couple of minutes. I’ll then cover our first quarter performance followed by Tom Bowman who will cover our operational update. Ian Fay, will then review our financial results and I will make some closing remarks before we open up the call for questions.
ZaZa is an independent exploration and production company focused on growing our production base in the Eaglebine play. We have what we believe is the premier land position in the volatile oil and wet gas windows in the Eaglebine and Walker County which is in the thickest most organically rich section of the Eaglebine in the Brazos Basin, because of the potential that we believe is in the lower Eaglebine and because of the other multiple pay zones on our acreage this is the core focus of our development plan.
I will get back to the Eaglebine in a bit, but first I’ll focus on developments in the Eagle Ford. As we announced in late March after having advanced discussions with multiple groups, we reached two separate agreements to sell our Moulton Assets in the Eagle Ford. One transaction closed in April which was for the sale of a portion of our Moulton acreage for $9.2 million. The second was for approximately 10,000 acres at a purchase price of $43.3 million. As I previously mentioned, we are in continued discussions with the purchasing party and I remain cautiously optimistic that the transaction will close. Both parties continue to work towards a successful closing in the next few weeks.
In the best interest of the company and our shareholders we have reengaged discussions with parties who were and remain interested in these remaining Moulton Assets. We've also entered into discussions with new parties that have expressed interest. In addition, we've engaged Simmons & Company to initiate a broader marketing process to pursue all potential interest in this property.
We need to remember that we bifurcated the Moulton property sale specifically in order to diversify away from single counter-party closing risk. This buyer that has not yet closed originally wanted the entire Moulton block, but I felt it to be the most prudent thing at the time to bifurcate and sale to two different buyers. Our strategy with the remaining land positions in the Eagle Ford is clear. We will continue to rationalize and monetize these assets whether through an outright divestiture or a sell down/farm-in type of joint venture as we high grade our acreage position and focus on the Eaglebine.
We currently have our Hackberry and Oakland prospects up for sale on POS as we deem these assets to be non-core. Although, Hackberry/Oakland is perspective for the upper Eagle Ford and the Edwards Lime as well as the Midway in Navarro plays we also have our daily prospect up for sale with POS which comprises 2000 acres in Southern Frio County. This block is perspective for the Buda, the emerging pure-salt play and the Eagle Ford.
Our Sweet Home acreage position comprises approximately 33,000 net acres and we have high graded it into 12 tier one development units. It is located in the gas condensate window in DeWitt and Lavaca Counties. We are in discussions with multiple interested parties regarding the Sweet Home acreage and have simultaneously begun to run a process with Simmons for Sweet Home divestiture or joint venture in part or in its entirety.
Now for the results of our operations in the Eagle Ford. For the three months ended March 31, 2013 our Moulton Assets generated 5 million cubic feet of gas and 22,435 barrels of oil. The majority of that production came from the Crabb Ranch well which as of yesterday has produced 116,500 barrels and 80 million cubic feet of gas in the first 18 months of production.
We reported 14 million cubic feet of gas in Sweet Home and 3,600 barrels of oil; in Hackberry and Oakland we report 18 million cubic feet of gas and 1800 barrels of well. Total production in Eagle Ford was 34,364 BOE versus 21,920 BOE in the first quarter of 2012. Please note that last year’s first quarter included 17,000 BOE in the [Katula] region which was divested as part of the Hess division of assets.
Including the Commodore and Stingray reentry wells on our Eaglebine prospect which have just begun flow-back our daily production is currently at 4.2 million cubic feet of gas and 310 barrels of oil or roughly a 1000 BOE per day.
Moving on to the Eaglebine; we've positioned this company to focus on developing our primary core asset, our Eaglebine acreage. As we move from Greenfield to early development, we have already captured value in the form of higher acreage prices than when we began taking leases as first movers in the area. We will now begin to capture value of this vast resource through the development of both our 19,000 net 100% wholly owned acreage and the jointly held acreage operated by our world class JV partner.
From an investment thesis perspective, ZaZa remains the most heavily weighted company to the Eaglebine in terms of net Eaglebine acres relative to total enterprise value, and as we move forward in the JV, much of our acreage will be in a partnership with one of the largest and most successful unconventional oil operators in the world. Given this relatively high Eaglebine weighting, the company stands to gain relatively more than any other public company as this play matures in its life cycle.
Now to the JV; as we announced in March, we entered in to a material joint venture which has us very excited about unlocking the potential in the Eaglebine for both the development of the lower Eaglebine and lower crutaceous sections. Quickly to recap and as covered in our releases and our SEC filing, this is a three phase agreement. In the first phase which we closed in April, we received $10 million in cash and our partner will drill and operate three wells, coverage 20,000 net acres. In the second and third phases, the cash payments will be $20 million each and the land positions 20,000 and 15,000 net acres respectively.
Pro-forma for all three phases, we will retain a 25% interest in approximately 73,000 net acres with 19,000 retained acres in the Eaglebine, 100% ZaZa owned. It is our plan to work closely with our JV partner throughout the operational phases of the JV and to continually evaluate the timing and potential returns associated with our development of our 100% owned assets. I would like to highlight that since year-end, we've acquired an additional 4,000 acres bringing our 100% owned acreage holdings up to approximately 19,000 net acres.
We expect the Eaglebine to be an asset from which we will develop and grow our production base. As I have mentioned in the past, this company is not and would not take single reservoir risk in an early stage pure play. We are dealing with stacked pay here. The Eaglebine provides us with multiple development opportunities including the Woodbine A sands, in addition to several other Woodbine sand packages. There is an Eagle Ford package or lower Eaglebine, the [Manas] shale, the Paluxy shale, and the Buda Rose play otherwise known as the lower cretaceous package. We have identified two key targets that we believe hold the most potential, the lower Eaglebine, or I guess now some people are calling it the El Hacon play, and the Buda Rose that I just mentioned which is vertically drilling to the Glen Rose in a lower cretaceous and commingling the zones from the Buda down to the Glen Rose.
Now I would like to turn the call over to Tom Bowman, so that he can provide with an operational update and a little bit more granularity surrounding the geological terms I just mentioned. Tom?
Thank you, Todd. Good morning everyone who is calling. This is Tom Bowman. I would like to start with a technical and operational review of our recent activity and our current view of exciting Eaglebine play that Todd was mentioning; and that’s based on our proof of concept was, we drilled in 2012 through the first quarter of 2013. Geologically speaking, our Eaglebine acreage is special. It is multiple stacked pays, multiple horizons and provides multiple development opportunities. ZaZa has been and continues to focus on the most organic rich inner-bedded limes and silts in the thickest portion of Basin just above the Buda formation. This is most analogous to the Eagle Ford and contains the kerogens needed for higher liquid yields at these depths. It's important to note that this interval is distinctly different from the Woodbine sand Play which we have been compared to at many instances. And we feel this interval offers significantly higher upside potential and productivity in reserves. This is the exact same horizon at El Hacon is called El Hacon by Halcon and our first proof of concept well to this target the Stingray 1H was a complete technical success and the data confirmed our early prognosis of the play. While drilling, we encountered liquid rich mud log shows throughout the entire lateral section. The logs the rotary cores all confirmed the presence of the organic rich shales with significant reserve potential.
The Schlumberger ELAN log analysis estimated the reserves to be 21 billion cubic feet of gas and 29 million barrels of oil per section in place, and estimated 980,000 barrels of oil recoverable using an 18% to 20% recovery factor. Although we had a case in failure in the Stingray proof of concept well, the well provided the company important data as it continues to technically prove up the slower Eaglebine play in the order in Walker County. During the short flow back period through one open fractured interval, we recovered some gas and 43.83 API gravity crude oil as per our Fesco analysis. The second horizon we are focused on and we believe also holds significant upside potential is a lower cretaceous fractured carbonate play, some people refer to this as the Buda Rose play which contains stacked Buda, Georgetown, Kiamichi, Edwards, Paluxy and Glen Rose formations. This reservoirs drilled and completed in vertical wells to depths between 10000 and 12500 feet across our acreage our perforated fracture stimulated and vertically commingled.
Recent rulings by the Railroad Commission of Texas allows for commingling of the Buda Rose formations in the Fort Trinidad area of Texas. The primary reservoir characteristics and the main objectives are a combination of fracture, porosity and permeability. The matrix porosity averages about 4% and the permeability about 1 millidarcy and are both ideal for the modern drilling and completion techniques that we are using. I would like to provide you with specific updates on our current drilling activity. It’s important to note however that ZaZa’s initial wells were designed to gather information needed to evaluate the multiple reservoirs and targets in the upper and lower cretaceous including the Eaglebine to confirm our commerciality and to focus on the best combined development strategies. We previously announced that we have drilled two recent wells to the Glen Rose formation; the Commodore and the Stingray reentry. Both wells are vertical with commingled completions. As we’ve reported these wells were successfully drilled to the top of the Glenn Rose and both wells had good mud log shows throughout the lower Eaglebine and lower cretaceous formations well drilling. The Commodore has been completed in the lower formations of the Buda Rose play with completions in the Glenn Rose, Paluxy and the Edwards.
Recently we have added the upper zones to the Buda and Georgetown formations which are now completed and are being tested separately from the lower zones. This well has started preliminary testing producing both gas and oil at controlled rates flaring the gas and monitoring the well, as the well continues to clean up the stimulation fluid. Currently we are designing our surface equipment to accommodate our production needs and we expect to test and to have efficient rates by the end of May. We have reached TD on the Stingray reentry well and now have finished the completion in the Buda Rose section also. Stingray and the Glenn Rose, the Paluxy, the Georgetown and the Buda. We have successfully finished the five stage completions across the zones using a combination of acid, propane and gel with each stage custom designed based on the formation of properties. We are currently testing the well at different rates, flaring the gas and monitoring the well as the well continues to clamp the stimulation fluid. We anticipate that gas to sales also before the end of May.
Moving on to the Eagle Ford expansionary at Sweet Home, as previously announced the company is Boening A1H well located at DeWitt County, Texas has been drilled and tested with favorable results. Currently we continue to test the well producing through seven of the 16 flow through products to determine the best production rates and prepare to install tubing to improve and increase our production rates. The [GOR] for the Boening well has been running less than 2500 and [GOR]. From an acreage standpoint ZaZa has recently high graded its Eagle Ford Sweet Home acreage into 12 tier one development units and expects to further delineate the Sweet Home acreage throughout 2013. We continue to monitor and evaluate all of our remaining Eagle Ford and Edwards assets. These include our Hackberry and Oakland positions to the east of Sweet Home, the Boening well results are changing our understanding and adding potential as the Eagle Ford expands behind and in front of the Edwards Shelf margin. The existing Edwards also has significant development potential. We continue to monitor gas prices for commerciality throughout this trend. Recent industry activity in the immediate area includes leasing for positions in the midway Navarro trend. We are continuing to do work up and full technical assessment of that trend.
With that said our key focus and excitement lies within the Eaglebine trend and in working with our joint venture partners to unlock its vast resources. As I mentioned, when I began speaking we believe the prospect is special, has multiple stack pays, multiple horizons and provides multiple development opportunities. We look forward to providing ongoing technical and operational updates during these development opportunities as we move into the next phase for our company's growth and evolution throughout 2013 and beyond. With that I would like to turn it over to Ian Fay, our CFO.
Thanks Tom. Good morning and thank you all for joining us today. I'll begin with a review of our first quarter performance and then provide some further details around our balance sheet and liquidity position. As there have been several material transactions for ZaZa since the end of our first quarter. Please note, all comparisons today are for the first quarter ended March 31, 2013, and March 31, 2012 respectively. In Q1, we reported revenues and other income of 2.8 million compared to 2.1 million in the comparable period last year. This increase of 33.3% was driven by our Boening well and Sweet Home which began gas production as Tom mentioned in February and contributed $300,000 to the quarter, as well as an increase in production on our molten acreage for the Crab Ranch well of 1.4 million and the rain unit of 0.6 million. The increase was offset by the loss of (inaudible) area revenue of approximately 1.6 million as a result of the (inaudible) division of asset.
Total operating cost and expenses were 8.6 million as compared to 43.7 million which was a decrease 35.1 million for the comparable period. Within this decrease, the most significant decline was in general and administrative expenses which were 6.9 million versus 42.2 million for the comparable period. This was comprised mostly and that is the G&A reduction was comprised mostly of number one, lower expenses than those incurred in connection with the combination of ZaZa and Toreador last February in the amount of 31 million. Number two, Toreador’s contribution to G&A decreased by 5.8 million and number three, G&A in the 2012 first quarter was offset by 2.1 million for reimbursement made under the terms of the Hess JV for expenses related to lease acquisition cost.
Our lease operating expenses were $433,000 or $12.60 per BOE produced as compared to $935,000 or $42.66 BOE produced in the comparable period last year. The decline was primarily due to the exclusion of [Cataula] which accounted for $406,000 again related to the Hess division of assets as well as a decrease in leased operating expenses of $256,000 in Hackberry. Offsetting these were slight increases in expenses in Moulton and Sweet Home which were approximately $140,000 combined.
Additionally we had $1.3 million of depreciation, depletion and amortization versus $585,000 in the comparable prior period. These increases are primarily due to the capital expenditures on oil and gas properties in 2012 and production for the first quarter of 2013.
We reported other expenses of $1.1 million versus $39.7 million, an improvement of $38.6 million for the comparable quarters. The primary components of this improvement were the following; number one, total interest expense was $3.6 million versus $1.4 million; two, we recorded a loss on extinguishment of debt of $15.1 million in the 2013 first quarter associated with an amendment to our senior secured notes versus no adjustment in last year’s first quarter.
The loss primarily relates to a decrease in the exercise price of the warrants associated with our senior secured notes to $2 and the extension of the exploration date to 2020 as included in the amended. Offsetting this loss is a gain in fair value of warrants associated with our senior secured notes of $11.2 million versus a loss of $38.2 million in the 2012 first quarter. This gain is driven by fluctuations in our stock price and faster time. And lastly, we recorded a gain in fair value of embedded derivatives associated with our convertible senior note of $6.3 million versus no adjustment in last year’s first quarter.
Pre-tax loss from continuing operations was $7 million versus the pre-tax loss of $81.3 million in the comparable period. We recorded an income tax benefit of $4.7 million versus $33.8 million expense in last year’s first quarter. We also reported losses from discontinued operations, net of income taxes of $554,000 in 2013 first quarter as compared to a loss of $2.7 million in last year’s first quarter.
This resulted in the net loss in Q1 2013 of $2.9 million or a loss of $0.03 per share both basic and fully diluted as compared to a net loss of $117.8 million or a loss of $1.35 per share both basic and fully diluted in the comparable prior period.
Now let's move on to the balance sheet. As of March 31, 2013 we had cash and cash equivalents of $8 million as well as restricted cash of $21.6 million. The restricted cash consists of $15 million held in escrow as a carryover from the termination of the Hess agreement and will be released once permits were successfully transferred we believe some time over the next 9 to 12 months.
The remaining $6.6 million has been earmarked for windup activities, French capital gains tax and severance cost related to our French conventional business which we feel (inaudible) in December of 2012. This compares to cash and cash equivalents of $34.6 million and restricted cash of $21.9 million as of December 31, 2012.
As of March 31, 2013 our long-term debt net of discounts was $100.4 million, of which $32.2 million is classified as current. This total consists of $27.1 million on our senior secured notes or $33.2 million principal minus a $6.1 million discount, $25.9 million on our convertible senior notes or $40 million principal minus a $14.1 million discount and $47.3 million on our subordinated notes. Less the current portion our total long-term debt as of March 31, 2013 was $68.2 million as compared to $71 million as of December 31, 2012.
Now let me make a few additional comments related to our recent transactions. As Todd mentioned earlier, the first phase of the joint venture in the Eaglebine provided us with an additional $10 million in cash, which will be reflected in our second quarter results and which along with the sale of a portion of our Moulton assets, which provided us with net proceeds of approximately $8.8 million gave us approximately $18.8 million of additional cash.
In parallel with these transactions we used $4.6 million of these additional cash to pay down debt and reduced the outstanding principal amount of our senior secured notes to approximately $28.6 million. We intend to aggressively pursue the sale of our remaining Moulton assets, as Todd mentioned earlier, consisting of roughly 10,000 acres and once completed, this should allow us to maintain an even healthier cash balance to, one, fund operations as we are currently in test production mode for the Commodore and Stingray verticals as Tom mentioned, two to fulfill our lease obligations, and three to continue to strengthen our lease position and retained effectively 100% 19,000 net acres in the Eaglebine, and lastly to leave enough free liquidity to maintain strategic optionality as we move through 2013 and into 2014.
As we mentioned on our 2012 earnings call, we have now instituted a cost reduction plan throughout the company which will result in a targeted 35% reduction in our overall G&A expenses. This reduction will be reflected beginning in the second quarter with a greater impact evident in the back end of the year due to some severance costs associated with our transaction plans.
As part of this general expense reduction, we've made significant changes to our headcount with a 55% reduction in our work force in order to right size our company in response to the positive strategic changes in development ZaZa has been through over the past several months.
We feel good about our prospects moving forward. Our balance sheet is stronger today and will be much stronger as we continue to monetize our Eagle Ford assets due 2013. The company was restructured to have flexibility and optionality and that's exactly what we are achieving.
With Eaglebine joint venture our carrying costs are significantly lower in the near-to-mid term. We maintain effective a 100% ownership in 19,000 net acres in Eaglebine, approximately 10,000 net acres in our Moulton prospect which includes interest in seven producing wells, approximately 33,000 net acres in the Sweet Home prospects which includes the 100% owned Boening well and approximately 18,000 net acres in the Hackberry/Oakland prospect, all three of these in the Eagle Ford trend. We maintain the goal of monetizing selected assets in the Eagle Ford in 2013, which will further decrease our carrying costs and obligations while generating more cash on hand for debt reduction and optionality strategically.
Every member of the ZaZa team remains focused on developing the assets we own but independently and jointly with our partners and working towards increasing shareholder value.
With that, I'll pass it back over to Todd. Todd?
Thanks, Ian. As you can see, we're taking steps to improve our balance sheet and we continue to do so through the rationalization of our Eagle Ford assets as we shore up our financial position through the rest of 2013 and beyond. Once we consummate the second sale of the Moulton assets, we will be sufficiently funded to execute on our 2013 strategy.
This strategy as we build this company is to develop the assets we have in the Eaglebine and grow our production base from there. As we monetize our Eagle Ford acreage, we use that capital to make any mandatory senior secured debt paydowns and we will fill out our Eaglebine acreage position as we prepare for the area as a whole as it now moves in to early development in this exciting emerging play.
Given our acreage position, we have a liquids-rich asset base with the type of stack pay that functions as an acreage multiplier. We have significant drilling inventory in large potential upside. We maintain one of the most consolidated acreage positions in the Eaglebine today. Within the JV, we will move up the learning curve and we have zero drilling and completion capital spend through the first nine sequentially drilled wells as we're being fully carried. Operator, at this time, we're ready for questions.
Okay. And your first question comes from the line of Robert Kecseg of Las Colinas Capital Management. Please proceed.
Robert Kecseg - Las Colinas Capital Management
I wanted to ask you about the asset sales, as I want to make sure, I understand it right, year-end position to or you had negotiated the sale this to two different parties and the one transaction closed the other one you are still talking. So if I understand right this is a second party that’s involve with the discussions for selling the other portion of the Moulton is that right?
Good question Robert, this is Ian Fay. That is correct, just to provide some detail around where we stand today. We did close on the first transaction related to Moulton, which yielded $8.8 million of net proceeds. At the time which we announced it we had entered into a purchase and sale agreement with the second party. Since that announcement, we have gone beyond the outside date to close that transaction. As we stand today, we are no longer exclusive with party, but continue to work without party to close the transaction as soon as practicable. We continue to everyday our discussion with them. However we are not obligated, because of the outside [day] being past to them and either party can terminate the agreement at anytime and we are not exclusive. As such as you can imagine with this asset from the beginning we’ve had interest, we’ve had calls that came in commensurate with the party that we entered into an agreement with interest in acquiring the acreage. We obviously have been keeping in touch in them though we haven't been able to speak to them until recently after we got through the exclusivity period. We have reengaged with all of those parties today.
Further as Todd mentioned earlier, we have engage Siemens to also launch or organize marketing process for this asset and we hope to capture all interest that exist in the market place as well as furthering those discussions with party that have been interested for the long haul. In parallel with that of course we still remain focus on bringing the transaction that we’d already sign to close with the party that we mention prior. Hopefully that answers your question.
Robert Kecseg - Las Colinas Capital Management
Sure, and for me its just a question because I was trying to figure out why the stock seem to we have kind of the negative perception in the company after you had a lot of positive announcements of why joint venture and so forth, and I am thinking maybe just the delay here maybe as the cause. And I want to ask you on the Commodore if I got that right, the Commodore is the second well in this Eaglebine cash right, and I was wondering about what the cost of that was to do that, it’s a vertical that I understand?
The commodore is our second well that was a strictly designed as a lower cretaceous test, so we drill that one through and great shows through the Eaglebine through the Buda Ross formations and we (inaudible) in top the Glen Rose.
We have done quite a bit of upside to an isolated testing in multiple zones here to from a cost perspective it’s not indicative of the cost of drilling these wells. This is a proof of concept well that we've done quite a bit of work on.
Robert Kecseg - Las Colinas Capital Management
And then about, is that around a 10,000 foot type of wellbore to get to that lower crustaceous?
No, it’s closer to 13,000 feet.
Robert Kecseg - Las Colinas Capital Management
And then, is there any sense of timing on when they may begin on the first joint venture well, just to give you some sort of -- even if it’s just a quarter here or quarter there to give us some sort of idea on that outlook of time?
Yeah, this is Todd. Before I go there, Tom mentioned 13,000 feet. The lower crustaceous section is about 1500 feet thick. So if in some areas of our block we will hit it at around 1105 and it runs down to about 13. So, just to clarify there.
And then regarding the joint venture, here's what I can tell you -- here’s what we've been explicitly permitted to say by our JV partner regarding JV status. Initial consideration payment has been made to ZaZa. We are preparing to begin a three well drilling program for Phase 1. We permitted the first well. We anticipate timely drilling and completion of each of the three obligation wells. Our ability to provide further status updates remain subject to the confidentiality obligations of our JV agreement. Investors can monitor the Texas Railroad Commission records and other public sources for further relevant information. That's my personal statement on that subject.
Robert Kecseg - Las Colinas Capital Management
I was just trying to get an idea. Thanks very much.
Your next question comes from the line of Brian Kabot of Riverloft Capital.
Brian Kabot - Riverloft Capital
It was good to see the EOG agreement in the 10-Q, hopefully that means we can start referring to them by name rather than our JV partner. Quick question for you with the announcement today of the 10,000 Moulton acres may be being pushed back a couple weeks. I know the last time that the window for management to buy stock opened up. You guys were fairly aggressive. And I am just wondering if this recent announcement pushes that window back a little bit.
My understanding is that my window opens 72 hours after this filing which would be Monday. Now as long as I'm not in possession of material and public information, my window is open. And at these levels I'm a buyer as I believe in the upside of this company.
Brian Kabot - Riverloft Capital
I appreciate that.
(Operator Instructions) We have no more questions. I would now like to turn the call over to Todd Brooks for closing remarks.
I'll just close by saying thank you very much for being on this call and I look forward to future updates in future calls. Thanks to everyone.
Thank you for joining in today's conference. Ladies and gentlemen, this concludes the presentation. You may now disconnect. Have a very good day.
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